iRobot 2007 Annual Report Download - page 43

iRobot PackBot with ICx Fido Explosives Detection Kit. This explosives-sniffing robot screens packages and
other potentially dangerous items while the operator remains at a safe distance. With all-terrain capability that
enables it to go virtually anywhere, the robot places ultra-sensitive detectors close to suspicious items and
determines within seconds if they are hazardous or harmless. The iRobot PackBot with ICx Fido Explosives
Detection Kit is an advanced security solution that also pinpoints people involved in the construction and
deployment of explosive devices.
R-Gator Unmanned Ground Vehicle. The R-Gator combines the field-proven technologies of the Deere &
Company M-Gator and our PackBot with state-of-the-art robot controls, navigation and obstacle detection
technologies jointly developed for R-Gator’s critical missions. The iRobot-John Deere R-Gator is a versatile
and rugged platform capable of taking on a wide variety of critical unmanned missions, such as a perimeter guard,
unmanned scout, “point man,” supply carrier and more. In conjunction with Deere & Company, we have made
available a limited number of R-Gator prototypes for evaluation by a number of potential government customers.
The net future proceeds of R-Gator sales, if any, will be shared between us and Deere & Company, subject to
recoupment of each party’s respective contribution to the project.
Contract Research and Development Projects
We are involved in several contract development projects with various U.S. governmental agencies and
departments. The durations of these projects range from a few months to several years. These projects are usually
funded as either cost-plus arrangements, firm fixed price, or time and materials contracts. In a cost-plus contract, we
are allowed to recover our actual costs plus a fixed fee. The total price on a cost-plus contract is based primarily on
allowable costs incurred, but generally is subject to a maximum contract funding limit. Under a firm fixed price
contract, we receive a fixed amount upon satisfying contractually defined deliverables. On our time and materials
contracts, we recover a specific amount per hour worked based on a bill rate schedule, plus the cost of direct
materials, subcontracts, and other non-labor costs, including an agreed-upon mark-up. A time and materials
contract may provide for a not-to-exceed price ceiling, as well as the potential that we will absorb any cost overrun.
Government funding is provided to further the development of robot technologies to solve various in-field
challenges and with the expectation that if the projects result in the development of technically viable prototypes,
then the government will purchase multiple production units for future use in the field. The government funding that
we receive allows us to accelerate the development of multiple technologies. While the U.S. government retains
certain rights to military projects that it has funded, such as the right to use inventions and disclose technical data
relating to those projects without constraining the recipient’s use of that data, we retain ownership of patents and
know-how and are generally free to develop other commercial products, including consumer and industrial
products, utilizing the technologies developed during these projects. The rights which the government retains,
however, may allow it to provide use of patent rights and know-how to others, and some of the know-how might be
used by these third parties for their own development of consumer and industrial products. The contract
development projects that we are currently undertaking include, but are not limited to:
Small Unmanned Ground Vehicle (SUGV) and Centralized Controller Device (CCD). Future Combat
Systems (FCS) is a major program intended to transform the U.S. Army to be strategically responsive and
dominant at every point on the spectrum of operations, through real-time network centric communications and
systems of a family of manned vehicles and unmanned platforms by the next decade. The FCS program
combines advanced technologies, organizations, people and processes with concepts to create new sources of
military power that are more responsive, deployable, agile, versatile, lethal, survivable and sustainable. The
FCS system of systems is designed to provide increased strategic responsiveness, adaptive modular organi-
zations, and units of action with three to seven days of self-sustainment.
Our specific role in the FCS program is to design and develop the SUGV, which is intended to be the
“soldier’s robot.” The SUGV is expected to be a light-weight, man-portable robot that will support recon-
naissance, remote sensing and urban warfare. In addition, we have been selected by Lockheed Martin
Corporation, the provider of the CCD for the FCS program, to be a key supplier of design and development for
the CCD’s controls and display through its estimated delivery in 2015. The CCD is a handheld device that will
allow an individual soldier to remotely control or query the systems in an FCS brigade — from a Class I
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Form 10-K